TV’s reach & digital’s precision: How connected TV is opening up new avenues for marketers
Nearly 20 million households representing 80 million users currently have connected TVs at home, as per an industry estimate
Connected TVs (CTVs) are one of the most rapidly growing market segments in India currently. Affordable prices of smart televisions, increasing data penetration, and the availability of global content are the prime factors for the spike in popularity of these internet-enabled devices that are replacing the good old linear televisions across cities. As per Mordon Intelligence, The Indian smart TV and OTT market is expected to register a CAGR of 5% between 2021 and 2026. This transformation of the idiot box has also attracted the attention of advertisers who want to achieve the reach of television with the benefits of digital advertising like targeted reach and content commerce. This has made the industry place big bets on the future of CTV advertising in the country; a medium that has already become quite popular amongst OTT, BFSI, auto, and e-commerce categories.
The enormous reach of connected TVs
As highlighted by Madison Digital CEO Vishal Chinchankar, India’s smart TV shipments grew 65% YoY in 2Q21 with smart TV constituting 80% share of the overall TV market during the Q2 2021. “Connected TV is the next big disruption in advertising that we will see just because of the price point. In India, you can get a Smart TV at 15K onwards, so the majority of people who are replacing their TV unit are buying connected TV. At this pace, large chunk of TV-owning homes will have connected TV as their TV set. It has already grown 3x in the last three years.”
Currently, 20 million households representing 80 million users have connected TVs at home, shares MiQ MD Siddharth Dabhade as he notes that it is further projected to grow 4x to reach approximately 80 million households (320 million users) by 2025.
Opportunity for advertisers to catch the young, urban, influential buyer
The growing penetration of CTVs in Indian households offer advertisers a vast pool of active buyers and influential decision-makers with high purchasing power to target.
dentsuMB India Managing Partner Indrajeet Mookherjee says, “There is headroom for growth in CTV advertising with multiple advantages. To begin with, since the urban youth’s viewership has gone up especially due to the pandemic, an important note to keep in mind would be how we target multiple people in a go. Moreover, user registration data allows cross screening targeting across other platforms as well, which expands upon the overall touchpoints used or real estate created that gets utilized for brand communication.”
This young audience of CTVs has varied active interests that make them open to experiencing new interests and products. Also, they are quite savvy when it comes to discovering, exploring and buying products online.
As Siddharth Dhabade highlights, “Nearly 30 million out of the 80 million CTV viewers are cord-cutters. This audience is an incremental audience to traditional TV campaigns. CTV audiences are predominantly young urban adults with high disposable income. As many as 89% of CTV users use social media, 82% use e-commerce and 44% are gamers.”
Targeted reach, better VTR, 100% viewability
As per industry experts, CTV combines the power of traditional TV advertising with the precision of programmatic, making it a more viable option for advertisers. Dhabade claims that CTV has a view-through rate (VTR) of greater than 95% and 100%.
Grapes COO & Strategy Head Shradha Agarwal adds, “One can measure CTV ads as well as optimize them in real-time. Ad targeting is getting simpler these days because advertisers have data and preferences of shows viewers are watching.”
Mookherjee adds that there is headroom for growth in CTV advertising with multiple advantages.
Multiple forms of advertising options
Unlike traditional television, CTVs offer the scope to experiment with the kind of advertising one wants to put out. Two standard formats are instream videos and display/native inventory. The advertisers also get to backlink their products to these ads, which in future could support content-commerce well.
While the instream videos on OTT and apps are quite popular, there is a great scope for growth for banner ads on home screens as well, a space that television brands like Samsung & Xiaomi and portable streaming devices like Amazon Fire Stick are already trying to fill.
Chinchankar shares, “On connected TV, you get instream 15, 20 or 30-sec video ads, other options like, rich media ads to interactive ads are also provided by a few. One of the largest OEMs in India has launched a variety of ad formats, one of them is what they call its 1st screen ad title position. It organically positions your brand and content on the home screen when a viewer turns on their Samsung TV or selects the home button on their remote.”
Mookerjee adds, “India is still young but evolving and CTV viewership is on the rise (last year we were globally at 81% and India was at 31%). This poses a growth potential that I believe will pick up soon. Home pages and banners are just beginning to become the choice of real estate. With AR and VR doing the rounds, content tech is the next big thing, which means a lot more innovation in the fields of customization and interaction will grow.”
Advertisers still warming up to the opportunity
While connected TVs offer a lot of benefits to the advertisers, they are still warming up to this relatively new real estate to push their communications through. Some of the immediate challenges are a lack of understanding of the medium & metrics and the cost being more than other forms of digital advertising.
Chinchankar quips, “To give a broader perspective, CTV advertising is nearly 1.5 to 2x more expensive than regular mobile-based advertising, however as the pool size grows, efficiencies will be better.”
Elaborating more on the metrics to chase, he adds, “Advertisers may need to re-define few of their KPIs (key performance indicators) to measure the effectiveness. Regular KPIs like CTR (click-through rate) and VTR (view-through rate) may give some direction in gauging the effectiveness of CTV. However, since consumer interactivity isn't the same as we see on mobile/desktops, your KPIs should also include R/F, lift in your brand metrics like awareness, consideration, PI or messaging association. We typically do a lot of MMT (match-market tests) to study the efficacy of campaigns executed on CTV.”
Agarwal agrees, “Before investing in CTV ads, it's always best to evaluate your TG, and priorities should be segmented into elements such as demographics, interests, and purchasing behaviour before selecting the ad inventory. Some of the biggest challenges when it comes to adopting CTVs are: media planning efficiency, measuring capabilities, overlap with linear TV, and ad inventory scale. These factors that may create a dilemma for advertisers.”
However, she highlights some immediate challenges too, “The two major challenges with CTV measurement are lack of access to many device platforms, which means that third-party verification vendors cannot run client-side in many cases. And the increasing use of Server-Side Ad Insertion (SSAI) in CTV ad delivery, which results in new complications around invalid traffic (IVT) detection. The lack of standardisation and common identifiers across the different CTV platforms are the other key issues to be dealt with.”
What the future is looking like
The industry is quite bullish about the future of the category as audience preferences and user behaviours evolve over time. And while the advertisers are primarily advertising on OTT platforms and other apps, the home screen still needs to capture the attention of big-scale advertisers, indicating how big an untapped opportunity and headroom for growth is there.
Chinchankar quips, “I personally am very bullish on this space for two reasons. One is that it is getting penetrated at a much faster pace. Also, the Gen Z population that we speak to are only used to consuming VOD content and not really skew towards appointment viewing. Additionally, if you look at the overall video advertising market, big giants are already dropping their unit prices to match it to the levels we pay CPRP to TV, so I won't be surprised if CTV will replace the traditional way we buy TV ads.”
Dhabade rounds off, “By 2025, India would have about 80 million households with Connected TV. We would see a major shift of TV advertising budgets to CTV. As the CTV tech stack improves, we would be able to measure cross-device conversions and apply very granular targeting criteria on CTV. With time, we also see publishers adopting IFA as an identifier which would improve the supply chain dramatically. Right now, connected TV is a no-click environment, but with time, the functionality to click within an ad would also come up.”
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